A jargon-free journey through the world of social media.

November 02, 2009

Four trends that will rattle retail this Christmas.

Remember a few years back, when online shopping reached a tipping point and simply became a standard part of the American holiday experience? Well this year, there are even more digitally driven shifts in the works, and you can bet that shoppers and sellers alike are going to notice.

Here are four to watch:

1. Smart phones as the ultimate shopping tool

If you own a pickup truck, everyone wants you to help them
move. If you own an iPhone, get ready to feel a similar dependence, because everyone will want you
to help them shop.

This time around, the iPhone is a veritable treasure trove
of easy-to-navigate review hubs and apps like RedLaser, a $1.99 download that
lets you scan product barcodes in stores to see whether you could find a better
price elsewhere.

Another easy trick is to use Google’s mobile app to search
for a specific product, then click “Shopping results for…” in your search
results. You’ll get a simple, scrolling list of online prices. Similarly,
Amazon’s app can help you see what you’d pay on their site for an in-store
item.

The downside of all these great tools? Only 17% or so of
Americans are on smartphones, so if you’ve got one, get ready to be dragged on
just about every shopping excursion this year.

2. Shopping directly from Facebook

Social networks, especially Facebook, have been huge assets
for popular retailers. But they pose one major problem: Selling something to
your fans almost always requires sending them away from Facebook, something users rarely want to do.

To overcome this hurdle, companies need a reliable and
secure way to sell products directly through Facebook.

How Off the Wall works: A brand posts an item for purchase
as a status update to its Facebook page. In turn, fans can purchase the product
directly from their live feed, news feed or the brand’s wall. They can also share
this status update with their friends and its ecommerce functionality is
maintained wherever it appears in Facebook.

Lots of startups claim to have found the holy grail that
lets companies harvest big bucks directly through social media, but Resource is
no small player. Their client roster includes DSW, Victoria’s Secret, L.L. Bean
and many more.

So far, Resource is keeping mum about which of its clients
will try out the Facebook sales tool in time for this holiday shopping season. If they’re smart, they all will.

3. Increased value of peer reviews

One interesting fact about social media is that once you
start using it, recommendations have an even stronger impact on your buying
habits.

• Online social network users were three times more likely to trust their peers' opinions over
advertising when making purchase decisions. ("Social Networking Sites:
Defining Advertising Opportunities in a Competitive Landscape,"
JupiterResearch, March 2007)

• Two thirds of UK social networkers (66%) are more likely
to buy a product as a result of a recommendation, compared to 52 per cent of
non-social networkers. (Royal Mail's Home Shopping Tracker Study, September
2007)

These stats are even more important in 2009 than when they
were discovered two years ago. Why? Because this was the year that social media
truly went mainstream, with millions of Americans from all walks of life
finally adopting social media as a standard part of daily life.

More socially savvy shoppers this season means we’ll see an
even bigger impact from consumer reviews — or I should say, we’ll see a bigger
impact from retailers who find ways to better incorporate reviews into their
shopping experience.

Some proof:

• One small e-retailer, AlpacaDirect.com, found that letting
customers post reviews directly onto the site led to a 23% increase in sales on
reviewed items.

• Customers who browse “Top Rated Products” pages spent 19%
more per order on Bass Pro Shops’ site and 63% more per order from PETCO,
according to data provided by the retailers.

• Another PETCO number: allowing shoppers to sort products
within a category by customer rating led to a sales increase of 41% per
shopper.

Obviously, any retailers who undervalue customer reviews
this holiday season do so at their own peril.

4. Less shouting of obscenities

With online shopping and price comparison really running the
show this year, I thought I’d end with one bit of good news for the
brick-and-mortar set.

In a 2006 survey by RightNow Technologies, respondents were
asked how they would react to a bad customer experience. 29% said they would
swear, and 21% said they would shout.

This year, the same survey found that only 20% would cuss,
and 14% would shout.

Is the world getting to be a more peaceful and tolerant
place? Of course not. “Nowadays,” the surveyfindings report, “consumers are taking their anger and
acting on it via word of mouth and social channels.

That’s right. They’re not yelling at the sales guy because
they know it would be more productive to go blog about how much they hate you
as a company. What a magical time of year!

Agree with the mobile thing. Interestingly, most retail stores aren't taking advantage of it. Right now you can get more on your mobile device in a store than you can get from the POP displays. Then again, retailers are often the last to get with it. They are still running FSI inserts (80 percent of their budget) when consumers spend 80 percent of their time searching for solutions. A little out of alignment. Clearly, the best retailers will start to incorporate mobile content as part of their displays. After all, even if they don't embed content in the store, the consumer can use the device to search anyway.

Man, I didn't think about my smart phone as becoming the ultimate in borrowed utility, but you're probably right! Just for everyone's info, the G1 Android phone has a free barcode scan app and it's pretty cool. When it scans a book, it even offers the text on Google Books if it's available!